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Ignite Restaurant Group Reports Fourth Quarter 2012 Financial Results

This press release includes “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events and results may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Examples of forward-looking statements in this press release include our planned new restaurant openings for fiscal 2013, the earnings accretion in 2014 resulting from the Romano’s Macaroni Grill transaction, and the opportunities to elevate the business, achieve synergies, and drive growth over time through the Romano’s Macaroni Grill transaction.

A number of important factors could cause actual events and results to differ materially from those contained in or implied by the forward-looking statements included in this press release, including the risk factors discussed in the Company’s Form 10-K for the year-ended December 31, 2012 filed with the Securities and Exchange Commission (SEC) (which can both be found at the SEC’s website
www.sec.gov) and each such risk factor is specifically incorporated into this press release. Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Sixteen Weeks Ended December 31, 2012

Sixteen Weeks Ended January 2, 2012

Fifty-Two Weeks Ended December 31, 2012

Fifty-Two Weeks Ended January 2, 2012

Consolidated Statements of Operations

Amount

Percent of Revenue

Amount

Percent of Revenue

Amount

Percent of Revenue

Amount

Percent of Revenue

(In thousands, except percent and per share data)

Revenues

$

112,603

100.0

%

$

101,391

100.0

%

$

465,056

100.0

%

$

405,243

100.0

%

Costs and expenses

Restaurant operating costs

Cost of sales

35,001

31.1

%

32,041

31.6

%

145,451

31.3

%

127,607

31.5

%

Labor and benefits

33,903

30.1

%

29,950

29.5

%

127,331

27.4

%

111,721

27.6

%

Occupancy expenses

10,401

9.2

%

9,168

9.0

%

33,846

7.3

%

30,708

7.6

%

Other operating expenses

21,000

18.6

%

18,920

18.7

%

81,219

17.5

%

72,296

17.8

%

General and administrative

10,084

9.0

%

7,159

7.1

%

31,725

6.8

%

23,556

5.8

%

Depreciation and amortization

6,019

5.3

%

5,274

5.2

%

18,572

4.0

%

16,011

4.0

%

Pre-opening costs

362

0.3

%

1,407

1.4

%

3,871

0.8

%

4,855

1.2

%

Restaurant impairments and closures

(18

)

(0.0

)

%

281

0.3

%

115

0.0

%

333

0.1

%

Loss on disposal of property and equipment

1,856

1.6

%

941

0.9

%

2,296

0.5

%

1,295

0.3

%

Total costs and expenses

118,608

105.3

%

105,141

103.7

%

444,426

95.6

%

388,382

95.8

%

Income (loss) from operations

(6,005

)

(5.3

)

%

(3,750

)

(3.7

)

%

20,630

4.4

%

16,861

4.2

%

Interest expense, net

(3,372

)

(3.0

)

%

(2,731

)

(2.7

)

%

(9,366

)

(2.0

)

%

(9,215

)

(2.3

)

%

Gain (loss) on insurance settlements

(1,016

)

(0.9

)

%

1,125

1.1

%

(799

)

(0.2

)

%

1,126

0.3

%

Income (loss) before income taxes

(10,393

)

(9.2

)

%

(5,356

)

(5.3

)

%

10,465

2.3

%

8,772

2.2

%

Income tax expense (benefit)

(2,811

)

(2.5

)

%

(4,349

)

(4.3

)

%

1,751

0.4

%

(3,291

)

(0.8

)

%

Net income (loss)

$

(7,582

)

(6.7

)

%

$

(1,007

)

(1.0

)

%

$

8,714

1.9

%

$

12,063

3.0

%

Basic and diluted net income (loss) per share data:

Net income (loss) per share

Basic and diluted

$

(0.30

)

$

(0.05

)

$

0.37

$

0.63

Weighted average shares outstanding

Basic

25,624

19,178

23,328

19,178

Diluted

25,624

19,178

23,329

19,178

Selected Consolidated Balance Sheet Information

December 31, 2012

January 2, 2012

(In thousands)

Cash and cash equivalents

$

6,929

$

3,725

Total assets

201,438

177,835

Long term debt (1)

45,000

114,750

Total liabilities

95,221

162,036

Stockholders' equity (1)

106,217

15,799

(1) Change from fiscal 2011 to fiscal 2012 reflects the impacts of the initial public offering in May 2012

Sixteen Weeks Ended

Fifty-Two Weeks Ended

December 31,2012

January 2, 2012

December 31,2012

January 2,2012

Selected Other Data:

Restaurants opened during the period

1

2

11

11

Number of restaurants open (end of period):

Joe's Crab Shack

129

119

129

119

Brick House Tavern + Tap

15

16

15

16

Total restaurants

144

135

144

135

Average weekly sales (in thousands)

$

49

$

47

$

63

$

59

Restaurant operating weeks

2,319

2,162

7,367

6,871

Comparable Restaurant Data:

Comparable restaurant base (end of period)

123

114

123

114

Average unit volume (in thousands)

$

717

$

700

$

3,050

$

2,970

Comparable restaurant sales percentage change

0.8

%

7.3

%

2.2

%

6.9

%

Average check (Joe's only)

$

23.78

$

23.18

$

23.80

$

23.07

Reconciliation of Non-GAAP Results to GAAP Results

The Company provided detailed explanations of these non-GAAP financial measures, including a discussion of the usefulness and purposes of each measure, in its Form 8-K filed with the Securities and Exchange Commission on March 20, 2013.

Sixteen Weeks Ended

Fifty-Two Weeks Ended

December 31,2012

January 2,2012

December 31,2012

January 2,2012

(In thousands, except per share data)

Net income (loss) - GAAP

$

(7,582

)

$

(1,007

)

$

8,714

$

12,063

Adjustments:

IPO-related expenses

-

-

1,864

-

Write-off of debt issuance costs

2,227

-

3,281

1,378

Non-cash loss on disposal of fixed assets related to conversion, remodels and closures

1,549

628

1,549

628

Loss (gain) on insurance settlements

1,016

(1,124

)

799

(1,126

)

Restatement expenses

825

-

1,873

-

Hedge termination

-

-

-

427

Other expenses

448

319

448

579

Income tax effect of adjustments above

(2,381

)

70

(3,853

)

(698

)

Release of deferred tax asset valuation allowance

-

(2,200

)

-

(4,659

)

Adjusted net income (loss) - non-GAAP

$

(3,898

)

$

(3,314

)

$

14,675

$

8,592

Weighted average shares outstanding (GAAP)

Basic

25,624

19,178

23,328

19,178

Diluted

25,624

19,178

23,329

19,178

Net income (loss) per share (GAAP)

Basic and diluted

$

(0.30

)

$

(0.05

)

$

0.37

$

0.63

Pro forma weighted average shares outstanding (non-GAAP)

Basic and diluted (1)

25,624

25,624

25,624

Adjusted pro forma net income (loss) per share (non-GAAP)

Basic and diluted(1)

$

(0.13

)

$

0.57

$

0.34

Adjusted net loss per share (non-GAAP)

Basic and diluted

$

(0.15

)

(1) Reflects 6.4 million shares of common stock issued in the IPO as if it occurred at the beginning of fiscal year 2011. Not presented for the fourthquarter of fiscal 2012 since these shares were oustanding for the entire period.

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